Author Question: Using statistical models to estimate the maximum losses a portfolio's value is likely to sustain ... (Read 415 times)

charchew · **on:** Jun 30, 2018

Using statistical models to estimate the maximum losses a portfolio's value is likely to sustain over a particular time period is called:

A) gap analysis
B) duration analysis
C) value-at-risk approach
D) credit-risk analysis

Question 2

Assess the impact on the bond market of the rise in Internet trading of stocks.

What will be an ideal response?

rachel · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

C

Answer to Question 2

The liquidity of the stock market has been increased by Internet trading of stocks. This increase in the desirability of stocks, all else being equal, results in a shift to the left in the demand curve for bonds, lowering the price and raising the interest rate.